Title
MOTION TO APPROVE THE AMENDED AND RESTATED AGREEMENT WITH DEANGELO CONTRACTING SERVICES, LLC. (DCS) FOR THE OPERATION, MAINTENANCE, AND MANAGEMENT OF THE CITY'S RIGHT OF WAY'S AND WETLANDS FOR AN INITIAL TERM THROUGH SEPTEMBER 30, 2029, IN THE BEST INTEREST OF THE CITY PURSUANT TO SECTION 35.18(C)(8) OF THE CITY’S CODE OF ORDINANCES.
Summary Explanation and Background
PROCUREMENT PROCESS TAKEN:
- Chapter 35 of the City’s Code of Ordinances is titled “PROCUREMENT PROCEDURES, PUBLIC FUNDS.”
- Section 35.18 of the City's Code of Ordinances is regarding "COMPETITIVE BIDDING OR COMPETITIVE PROPOSALS REQUIRED; EXCEPTIONS."
- Section 35.18(C) states that "Only the following situations are exempt from the competitive bid and competitive proposal requirements of this section:"
- Section 35.18(C)(8) states, “Best interest of the city. Purchases of and contracts for commodities or services are exempt from this section when the City Commission declares by a simple majority affirmative vote that the process of competitive bidding and competitive proposals is not in the best interest of the city. The City Commission shall make specific factual findings that support its determination, and such contracts may be placed on the City Commission consent agenda."
- Section 35.21 of the City's Code of Ordinances is titled "AWARD OF CONTRACT."
- Section 35.21(A) of the City's Code of Ordinances is titled "City Commission Approval."
- Section 35.21(A)(1) states, "An initial purchase of, or contract for, commodities or services, in excess of $25,000, shall require the approval of the City Commission, regardless of whether the competitive bidding or competitive proposal procedures were followed."
- Section 35.29(C) states, "The City Manager or his or her designee is authorized to extend, for operational purposes only, and for a maximum of 180 days, any contract previously approved by the City Commission and entered into by the city. Any further extensions of the contract require the approval of the City Commission."
SUMMARY EXPLANATION AND BACKGROUND:
1. On February 28, 2013, the City Commission, during a workshop/retreat, requested that the City Manager explore function sourcing for the Utility System, Customer Service, Parks Maintenance, General Government Services, and Streets and Sidewalk Services.
2. On April 17, 2013, the City Commission approved the advertisement of RFQ# PSPW-13-10 "Operation, Maintenance and Management of Public Rights of Way (ROW)." The purpose of the Request for Qualifications (RFQ) was to solicit statements of qualifications from vendors capable of operating, maintaining, and managing the City's public rights of way (ROW).
3. On June 4, 2013, the City opened four sealed proposals from the following firms (listed in alphabetical order):
- Calvin, Giordano & Associates, Inc.
- DBi Services, LLC.
- Gnostic Patriarchate The Great Basilica Inc.
- Municipal Business Management
4. On June 6, 2013, the Evaluation Committee conducted their evaluation of the proposals, using to the criteria provided in the RFQ, which is also listed below, and determined DBi Services, LLC. ("DBi") to be the most responsive and responsible proposer.
- Company Background and Capabilities 20 points
- Relevant Operations and Maintenance Experience 30 points
- Financial Qualifications 20 points
- Other Management Experience 10 points
- Key Personnel Assigned to Project 15 points
- Local Vendor Preference 5 points
5. On June 19, 2013, Administration brought an item before commission recommending the City Commission approve the recommendation of the evaluation committee for PSPW-13-10 and award the project to DBi Services, LLC. and direct the City Manager to negotiate a contract for services to be brought back to Commission for final approval. The City Commission approved a substitute motion which included approving the recommendation of the evaluation committee and directing the City Manager to bring back a price for consideration by the City Commission rather than a contract for services.
6. City Administration began discussions with DBi Services, LLC. to provide sufficient information to the vendor in order for them to provide a price for services. As a result, DBi Services, LLC. proposed a price of $887,550, which provided the City with an opportunity to provide a significant savings while still being able to provide the residents with the same level of service. The price proposal included:
(A) Personnel and Management: DBi Services, LLC. will provide the labor, management, and oversight needed to efficiently operate and maintain the city owned highway facilities to include sidewalks, street sweeping, lighting, guardrail repair, temporary sign repair for regulatory signs to ensure safety, incident response. In addition, DBi will provide routine inspection of highways and reports of maintenance needs for work to be done by others including signs, striping, traffic signals, and other deficiencies as identified during the normal course of inspection. DBi will also provide all employees with a benefits package and a safety program that includes essential equipment and training.
(B) Operating Supplies: DBi will procure and administer the acquisition of all vehicles, equipment, tools, materials, and other supplies needed to operate and maintain the City rights of ways. This includes providing all necessary personnel with a vehicle, uniform, fuel, and tools needed to effectively complete the job.
(C) City's Responsibilities:
i) Oversight of the contract and administrative support
ii) Capital improvements such as roadway, drainage and landscape improvements. Each year DBi Services, LLC. will assist City Administration in identifying the capital needs. The City will be responsible for budgeting and procuring those capital improvements approved by Administration and Commission.
iii) Maintaining the electricity costs for the street lights.
7. DBi's proposal affected one City position and fifteen contract positions, however DBi agreed to interview all current City and contract employees for any available positions that DBi would need as a result of obtaining the contract.
8. On September 18, 2013, the City Commission approved the award of RFQ# PSPW-13-10 "Operation, Maintenance and Management of Public Rights of Way (ROW)" to DBi Services, LLC. and the negotiated agreement in the initial annual amount of $887,550 which resulted in a total overall city savings of $637,531 for the 2014 fiscal year.
9. The agreement was for an initial five-year term, commencing on November 1, 2013, through October 30, 2018. The agreement included the option to renew for one additional five-year term, upon mutual consent and the execution of a written amendment. The original agreement also included an initial annual fee for services in the amount of $887,550, and also provided for the contractor to invoice for any emergency work at the Contractor's direct cost plus a mark-up of 15% for overhead and profit.
10. On February 17, 2016, the City Commission approved the first amendment to the agreement increasing the annual fee for services from $887,550 to $1,041,550 and adding an owner's contingency of $200,000, effective March 1, 2016, relating to the increase in the scope of work for:
- Increased routine maintenance for additional roadways;
- Street sweeping in areas not originally included in the original agreement;
- Inclusion of roadway irrigation pump repair or replacement within the scope;
- Incorporation of repairs to roadway lighting not originally covered in the scope of work; and
- Integration of inspections, cleaning, and repairs to existing drainage systems that service public roads as mandated by the National Pollution Discharge Elimination System (NPDES) permit.
11. On February 21, 2018, the City Commission approved the Public Services Department recommendation on the contract database report to enter into the second amendment to renew the agreement for its final five-year term, commencing on November 1, 2018, and expiring October 31, 2023. Pursuant to the original agreement, the annual fee for services would be automatically increased by ten percent at the renewal term, as a result the annual fee for services was increased to $1,145,705.
12. On October 22, 2021, at 5:30 pm the Public Services Director received a call from DBi's project manager stating that he had just been notified that DBi was closing its doors effective immediately.
13. The Public Services Director was able to confirm those statements the next day via several news articles.
14. The following week, the Public Services Department started working on a solution by hiring the unemployed DBi staff on a temporary basis until the services could be put out for bid and a new contract could eventually be put into place.
15. As the Public Services Department was coordinating this effort, the Public Services Director was contacted by Mark Robinson, a representative for Paul DeAngelo. Mr. DeAngelo started DBi in 1978 and sold the business in 2016.
16. Mr. DeAngelo had started a new company called DeAngelo Contracting Services, LLC. ("DCS"), and they were very interested in assuming DBi's contract and hiring the former employees.
17. Mr. Robinson met with the City Manager and the Human Resources & Risk Manager the week of November 1st, 2021, after which the City Manager gave direction to the Public Services Director to work wit the City Attorney's Office, DBi, and DCS in order to get the contract reassigned.
18. By November 8, 2021, DCS hired staff and started providing services for the City of Pembroke Pines at the Contractor's own risk.
19. The City's Administration presented a motion to approve the assignment of the agreement with DBi for the Operation, Maintenance and Management of Public Rights of Ways to DCS at the November 17, 2021 Commission meeting, however the City Commission asked the City's Administration several questions and deferred the item to the December 1, 2021 Commission meeting.
20. At the December 1, 2021 Commission meeting, DCS made a presentation to the City Commission and the City Commission approved the assignment of the agreement with DBi to DCS, retroactively effective on November 8, 2021. The assigned agreement retained the same total annual fee for services of $1,145,705 plus an owner's contingency of $200,000.
21. On October 11, 2023, the City Manager and DCS executed the fourth amendment to the agreement to extend the agreement for 180 days from November 1, 2023 through April 29, 2024. The fourth amendment was subsequently amended and restated to reflect a prorated service fee in the amount of $572,852.50 plus a $100,000 contingency for the six month (180 day extension) period.
22. In lieu of going out to bid, the Public Services Department believes that it is in the best interest of the City to renegotiate the existing agreement with DCS. As a result, Administration is presenting an amended and restated agreement with DCS for an initial term through September 30, 2029, which has the option to renew for two (2) additional five (5) year terms upon mutual agreement of the parties. The re-negotiated agreement includes:
- An initial annual Fee for Services in the amount of $1,451,675, prorated to $725,837.50 for the six month period from April to September 30, 2024.
- $1,195,175 of the initial annual Fee for Services is related to the same or higher level of service for items such as sidewalk repair, curb and gutter repair, roadway asphalt repairs less than four square feet, shoulder of road repairs, incident and emergency response, street lighting repairs, monthly street sweeping, guardrail, attenuator, object marker, and delineator repairs, that are currently being done by DCS.
- The remaining $256,500 of the initial annual Fee for Services is related to adding the scope of work for DCS to perform wetland maintenance at the following wetland conservation areas; Academic Village, Alhambra - Pembroke Springs, Chapel Trail Florida Wetlands Bank, Forman Parcel, Foxcroft, FP&L Easement, City Center / Pines Lakes Water Management Association, the Carl Shechter Southwest Focal Point Community/Senior Center, Sheridan Street Commerce Center Parcel A, and SW Pines Nature Park.
- The current agreement included a $200,000 annual owner's contingency along with language that for any emergency work, the City would pay the contractor's direct costs for the emergency work plus 15% for overhead and profit. The City's Administration has negotiated the 15% markup down to 7.5% in the new re-negotiated agreement.
- In addition, the City has removed the $200,000 annual owner's contingency from the re-negotiated agreement and has replaced it with a $500,000 annual allowance based on line item pricing that is outlined in Exhibit E of the re-negotiated agreement. This annual allowance will be used by various department, such as the Utilities Department for asphalt and concrete repairs related to the installation and repair of the underground utility infrastructure that often involves removing or damaging portions of roads and sidewalks, which must then be restored. In addition, the Recreation and Cultural Arts Department also plans to utilize this allowance for concrete and sidewalk repairs at various parks, which may have been a result from tree roots, damage from equipment, etc.
- In addition, the re-negotiated agreement includes that on October 1, 2024 and annually thereafter, the Annual Fee shall be automatically adjusted according to the annual Consumers Price Index (CPI-U) Miami-Ft. Lauderdale, FL Area for the month of April or 4%, whichever is less but not less than zero.
23. Section 35.18(C)(8) "Best Interest of the City" of the City's Code of Ordinances states "Purchases of and contracts for commodities or services are exempt from this section when the City Commission declares by a simple majority affirmative vote that the process of competitive bidding and competitive proposals is not in the best interest of the City. The City Commission shall make specific factual findings that support its determination, and such contracts may be placed on the City Commission consent agenda."
24. Below are the factual findings:
- On April 17, 2013, the City Commission approved the advertisement of RFQ# PSPW-13-10 "Operation, Maintenance and Management of Public Rights of Way (ROW)" to solicit statements of qualifications from vendors capable of operating, maintaining, and managing the City's public rights of way (ROW).
- On June 6, 2013, the City's evaluation committee determined DBi Services, LLC. (DBi) to be the most responsive and responsible proposer out of the four sealed proposals that were received through the competitive bidding process.
- On September 18, 2013, the City Commission approved the negotiated agreement with DBi for an initial five-year term, which resulted in a total overall city savings of $637,531 for the 2014 fiscal year, along with additional savings for future years.
- The agreement with DBi gave the City the opportunity to provide significant savings while still being able to provide the residents with the same level of service.
- Paul DeAngelo started DBi in 1978 and sold the business in 2016, and since then Paul DeAngelo started a new company called DeAngelo Contracting Services, LLC. (DCS).
- On October 22, 2021, DBi closed is doors for business, and as a result DCS reached out to the City to work on having the contract reassigned to DCS and DCS even hired staff and started providing services for the City of Pembroke Pines at the Contractor's own risk, on November 8, 2021.
- On December 1, 2021, the City Commission approved the assignment of the agreement with DBi to DCS, retroactively effective on November 8, 2021.
- DeAngelo Contracting Services, LLC. has performed an excellent job in providing services to the City of Pembroke Pines throughout the term of the contract for the Operation, Maintenance, and Management of the City's Right of Way's.
- The City of Pembroke Pines still currently has an agreement which is in effect and the re-negotiated agreement will provide terms that are more favorable to the City of Pembroke Pines.
- DCS has held their contracted annual fee for services at $1,145,705 since November 1, 2018, which means that they have not had a price escalation for more than five years including during the COVID-19 pandemic and all of the market fluctuations throughout the years.
- DCS has agreed to perform additional scopes of service including wetland maintenance for the City's various wetland conservation areas.
- The City has negotiated to pay the contractor their direct costs for the emergency work plus 7.5% for overhead and profit in lieu of the 15% in the City's current contract.
- The City anticipates on saving approximately $5,213,691 over the initial term of the contract when compared to bringing these services in-house.
- By continuing to utilize DeAngelo Contracting Services, LLC., the DCS employees that have been providing services for a number of years would not need to worry about changes in their employment, including accrued time and benefits, if the City were to change service provider.
25. Request Commission to approve the amended and restated agreement with DeAngelo Contracting Services, LLC. (DCS) for the Operation, Maintenance, and Management of the City's Right of Way's and Wetlands for an initial term through September 30, 2029, in the Best Interest of the City pursuant to Section 35.18(C)(C)(8) of the City’s Code of Ordinances.
Financial Impact
FINANCIAL IMPACT DETAIL:
a) Initial Cost: $725,837.50 for the prorated annual fee for services from April through September 30, 2024, along with the prorated annual allowance in the amount of $250,000)
b) Amount budgeted for this item in Account No: Funds are budgeted in account # 100-541-6002-534983-0000-000-0000 (Function Sourcing - Rights of Way) for the annual fee for services. The annual allowance will be coded to the various departments that utilize the services on an as-needed basis, typically under Object Code # 546150 (R&M Land Bldg & Improvement).
c) Source of funding for difference, if not fully budgeted: Not Applicable.
d) 5 year projection of the operational cost of the project: The amended and restated agreement with DCS for an initial term through September 30, 2029, which has the option to renew for two (2) additional five (5) year terms upon mutual agreement of the parties. In addition, the re-negotiated agreement includes that on October 1, 2024 and annually thereafter, the Annual Fee shall be automatically adjusted according to the annual Consumers Price Index (CPI-U) Miami-Ft. Lauderdale, FL Area for the month of April or 4%, whichever is less but not less than zero. The amounts shown below include the maximum 4% annual CPI increase:
|
|
Current FY |
FY 2 |
FY 3 |
FY 4 |
FY 5 |
FY 6 |
|
Revenues |
N/A |
N/A |
N/A |
N/A |
N/A |
N/A |
|
Annual Fee |
$725,837.50 |
$1,509,742 |
$1,570,131.68 |
$1,632,936.95 |
$1,698,254.43 |
$1,766,184.61 |
|
Allowance |
$250,000.00 |
$500,000 |
$500,000.00 |
$500,000.00 |
$500,000.00 |
$500,000.00 |
|
Net Cost |
$975,837.50 |
$2,009,742 |
$2,070,131.68 |
$2,132,936.95 |
$2,198,254.43 |
$2,266,184.61 |
e) Detail of additional staff requirements: Not Applicable.
FEASIBILITY REVIEW:
A feasibility review is required for the award, renewal and/or expiration of all function sourcing contracts. This analysis is to determine the financial effectiveness of function sourcing services.
a) Was a Feasibility Review/Cost Analysis of Out-Sourcing vs. In-House Labor Conducted for this service? Yes.
b) If Yes, what is the total cost or total savings of utilizing Out-Sourcing vs. In-House Labor for this service? Based on the attached analysis, we anticipate a savings of approximately $5,213,691 over the initial term of the contract by outsourcing these services in-lieu of utilizing in-house labor.